EU Tries To Bridge Pension Portability Gaps

June 12, 2002 (PLANSPONSOR.com) - The European-Union
Commission has kicked off talks with both unions and
corporate leaders in an effort to help workers more easily
switch jobs from country to country without losing part of
the pensions to taxes.

Employees moving between countries have to get special
permission and are often hit with a “prohibitive” tax bill,
according to the commission.

It’s often difficult to even transfer pensions within
the same country. In both France and Finland, employees
can’t move pension assets from one company plan to another.
Elsewhere, workers can transfer their assets, but often
lose money in the process according to a Dow Jones
report.

That difficulty may explain the job-switcher statistics.
Only 16.4% of EU workers changed jobs in the first year,
compared with 30% in the US, the Commission said.

The Commission also complained that companies make it
unnecessarily difficult for workers to obtain any pensions
in the first place. It criticized the high minimum age for
membership and the lengthy qualifying periods for company
pension plans.

Unions and employers must come up with proposals within
12 weeks to improve pension mobility. After that, the
Commission could come up with its own legislation,
officials said.